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When investing in insurance, mutual fund, or bonds, chances are that you chose a particular distributor based on convenience and perhaps the commission passed back.

However you need to realize that your distributor can also be your financial advisor, because a distributor can add a lot more value and contribute to the success of your financial plans.

Why do you need a financial advisor? Here’s why:

Professional Counseling: You need a professional to keep abreast of the fluctuations in the financial markets today!

Constant Monitoring: You should ideally review your portfolio of investments often to ensure that it’s relevant and appropriate for you in the changed circumstances. Your financial advisor can monitor the progress for you.

Handling Paperwork & Follow-ups: These professionals will take care of the nitty-gritty’s, in case you are too busy.

Therefore your distributor must be highly competent at his job and he must be someone you can trust.

Take into account the following tips to appoint a distributor for yourself…

Experience: You are looking for an experienced advisor who can give you valuable advice on how to deal with the market fluctuations.
Expertise: He/she must be an expert in the fields of personal finance and investing, be comfortable with tax issues and regulatory aspects and how they affect your investments. Test his knowledge by asking a few probing questions or even speak to his existing clients.
Clients: Someone who has too many clients is bound to be very busy! He should be available, and be able to address your concerns form time to time. Also check if the infrastructure - office staff, equipment, etc. to meet his operational requirements - is leaving him enough time to meet his clients.
Reputation: Your financial advisor should ideally be introduced by someone whom you trust. If not, ask for some references from clients or fund houses so that you are convinced about his integrity.
Attitude: Gauge it in the very first meeting. Signs that he’s the wrong choice:
• He’s not listening carefully to you.
• He’s not asking you specific questions relating to your long- term requirements.
• He tries to interest you in the current trend without even bothering to find out if it is suitable to you or not.

Investing in shares does yield rich dividends but one has to take care of certain key factors before making a foray in this area.

• Scrutinize the financial pages of your dailies; learn to recognize a stable company. Make a thorough study before making a splash. A “good’ company can be determined by its products. The less ‘fashionable’ its products, the better its prospects in the share market. e.g. Companies that produce cement or aluminum may have a higher growth potential than a makeup company.

• A sense of timing is very important. It is almost impossible to pick shares at the bottom of the price swing and at their peak. Moreover, every peak is followed by a crash in the stock market. So, a healthy dose of common sense is a substitute for your experience and will guide you when to buy, sell or simply hold on to what you have – that’s a reliable way to ensure a good, steady profit.

• The stock market is open to the forces of supply and demand; nevertheless the government ensures a form of security for the investor. Be sure to read the Annual Report issued to every shareholder of a company. This lets you know the company’s progress, how and where your money is being used, and at what profit or loss. The company must also report to the shareholder on anything that may influence the price, such as a takeover, etc.

During a down period, what you can do is hold on to your stock – if you’ve chosen well, your shares should regain their value in time.


Financial pages of newspapers may seem like an incomprehensible mass of names and numbers. But that’s not what they are. One must be able to understand the pattern that the listing follows. This is how it reads:

1. The company’s name: Listed alphabetically

2. Year’s high and low: Each share’s highest and lowest trading price for that year

3. Price: As it stood when the market closed the day before

4. + (Plus) or – (minus): The amount by which shares rose or fell on the day of trading (look for trends here)

5. Day’s range of sales: The price ranges from highest to the lowest

P.E. ratio: Price divided by earnings per share. This tells you what the company earned per share the year before and how expensive or cheap the share is as compared to other shares


Any stock market expert will tell you that historically shares have yielded the highest returns. So it would be fair to assume that a fair share of your portfolio should be in stocks --- QUALITY STOCKS. But how do I recognise a quality stock, you would ask? Quality companies are typically characterised by incomes that grow at a faster rate than the entire market as a whole, by their experienced and reputable managements, and by their low debt levels. The stocks of these companies typically recover the fastest after any downturns in the market. Keep abreast of the stocks you’ve invested in via articles in investment journals, company annual reports and their quarterly results.
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